The Federal Reserve raised its benchmark interest rate a quarter of a point this week- just the fifth time during the recovery period of our nation’s most recent financial crisis. So what does that mean for home buyers and sellers? The short answer is, take advantage of the market as soon as possible. We could be in for a period of fluctuations. The Fed predicts interest rates will climb three more times in 2018. These predictions are fueled by economic growth and low unemployment. Last Friday, the Commerce Department estimated that employers added 228,000 jobs in November. However, inflation (a general increase in prices and fall in the purchasing value of money) has not kept pace with a growing economy, which may keep home prices from rising too rapidly.
Home buyers, get off the fence and jump into the real estate market before rates go any higher. For sellers, there will be a higher demand through 2018 and stable prices, or in some markets, very competitive prices. It’s a good time to sell.
Higher interest rates may drive lenders to make more loans to a broader base of customers, loosening some of the tight lending standards of the past few years because they can take on more risk, This opens the door for millions of credit-worthy borrowers that may have previously been denied a mortgage.
If you have been considering refinancing, do it now if your current loan is over 1% higher than prevailing rates. With climbing interest rates, the window of opportunity is closing fast.
Overall, there are opportunities on all fronts in real estate, as long as you realize what is potentially coming in the future as far as the impact of climbing interest rates. Please contact our realty team so we may review your particular situation, to determine if it is the right time to buy a new home or sell your property.
